Designated beneficiary/testamentary trust
The client placed on a beneficiary form “trust created under the will”. Is this considered a non human beneficiary for RMD purposes or would this trust (assuming the 4 qualifications are met) would be considered a pass through/look through and the RMD would be based on the oldest beneficiary?
Permalink Submitted by Bruce Steiner on Mon, 2009-08-24 20:07
If (as is likely) the Will creates more than one trust, it won’t be clear which trust is the beneficiary.
Bruce Steiner, attorney
NYC
also admitted in NJ and FL
Permalink Submitted by Denise Dawson on Mon, 2009-08-24 20:26
Let’s say that it is the only trust that is created by the will and we will assume that the trust qualifies as a look through… can the RMD’s be based on the oldest bene or since the will was on the bene form does the non human RMD rules apply?
Permalink Submitted by Alan Spross on Mon, 2009-08-24 22:00
Generally, as long as the testamentary trust is valid under state law, and meets the other requirements of a look through trust, the trust beneficiaries will be treated as designated beneficiaries for purposes of RMD determination. If however, the will does not do an adequate job of creating the trust or creates ambiguities that result in the IRA going to the estate or other related problems as Bruce mentioned, then the IRA would be treated as having a non individual beneficiary.
Permalink Submitted by Denise Dawson on Tue, 2009-08-25 12:57
Thank you all who responded! Helps a lot!